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Chapter 1: The Short Story about Surviving Credit Card Debt

Why Should a Debt Collection Attorney Work for the Other 20 Percent?

According to consumer debt expert Budd Hibbs, “A judge told me . . . in a pretty good sized county . . . near Dallas that in one month just over 1,200 civil cases were filed at that courthouse and out of that, over 1,000 of them were debt collection cases. Unfortunately, he said that of the 1,000 that were filed, more than 80 percent went to default judgment." . . . .

CNBC and other media outlets reported credit card default rates reached record highs in April (2009) Some banks reported annualized default rates going over 10 percent. According to statisticians, credit card default rates track the rate of unemployment which in April 2009 stood at 8.9 percent.

According to the Nilson Report’s April 2009 issue (a newsletter for the credit card industry) 91.1 million Americans had one or more credit cards at the end of 2008.
.089 X 91,100,000 is 8,107,900 people defaulting on their credit cards this year. Why should a debt collection attorney work for the other 20 percent?
If you resist, you will be in the other 20 percent.

Understand that while the debt is yours, it is your legal right to deny it, to dispute it and to insist that the collection attorney document their case against you, proving:
a. There was a contract between you and the original creditor;
b. They can document their ownership of the debt if they are not the original creditor;
c. How they arrived at the specific amount of the debt they say you owe.
All of this can be too much work for an opportunistic collection attorney, who would prefer to find less resistance with another debtor.

Again, do NOT take telephone calls from collectors. If they have sent you a mini-Miranda and you have responded properly to it, you have instructed them not to call and by doing so they are in violation of the FDCPA. If they call out of the blue, they are just a voice on the other end of the line, and you do not discuss your personal finances with strangers. They want you to admit to the debt and re-contract with them.

If the collection agency, junk debt buyer or collection attorney respond to your debt validation letter with documentation (usually a few copies of past account statements and sometimes an unsigned contract) reply CRRR disputing the debt, stating the documentation is insufficient and asking for more.

20-30 years ago if you were behind in payments, your bank would have called to remind you that you credit rating would suffer if you failed to pay the unsecured credit card debt, and that would have been the end of it. Unsecured bad debt meant a bad credit rating for a while. Over the years, however, a whole debt collection industry has blossomed as Americans have used more and more credit cards. Paying collection agencies, attorneys, and junk debt buyers who prey on people during hard times is not morally or ethically appropriate, or legally required. It simply creates more problems for those paying and for other debtors down the road.

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